Californians May Lose Federal Jobless Aid as Rate Falls

California’s jobless rate declined
to a four-year low of 8.5 percent last month, triggering an end
to benefits for more than 100,000 people still out of work,
according to the state employment agency.

Under U.S. Labor Department rules, residents are no longer
eligible for the final 10 weeks of extended federal unemployment
benefits known as tier 4, because the state jobless rate has
fallen below a moving three-month average of 9 percent, the
California Employment Development Department said yesterday.

California, among the hardest-hit states in the 18-month
recession that ended in June 2009, has crawled its way back and
seen its jobless rate fall from a record 12.4 percent in October
2010. A year ago, the state remained mired in a slump and
matched Rhode Island for the nation’s second-highest jobless
rate, trailing only Nevada. With the June figures, the Golden
State inched closer to the U.S. 7.6 percent average.

The state labor agency warned that it expects to be
notified today that more than 100,000 Californians currently
receiving extended benefits will face a cutoff, unless they can
qualify for the final 10 weeks of aid before Aug. 11. More
unemployed workers may also be affected later, the agency said.

Those who are already collecting and remain eligible can
receive aid until Dec. 28 or until it runs out, whichever comes
first, the agency said.

Biggest Gains

California posted the largest nonfarm payroll gain of any
state, adding 30,200 jobs last month, Labor Department figures
show. The state’s jobless rate fell from 8.6 percent in May and
9 percent in April. Led by a revival of the housing market and
construction, California has added more than 250,000 such jobs
in the past year to reach about 14.6 million, the agency said.

The state said more aid cutbacks are on the horizon. All
extensions to the basic 26 weeks of state unemployment benefits
are set to run out at the end of this year unless Congress votes
to renew them.

Basic benefits plus all state and federal extensions have
let jobless workers receive aid for as long as 99 weeks during
the recession and its aftermath. Benefits were trimmed earlier
this year, when Congress allowed automatic spending cuts to kick
in under a process known as budget sequestration.

More than 750,000 Californians are collecting unemployment
checks, with almost half on federal extensions, the state agency
said. The agency paid out $13.8 billion in benefits last year
and $5.8 billion in 2013 through June.